Page 26 - Dragados 2022 Benefits Guide

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26
Dragados 2022 Benefits Guide
401(k) Plan Retirement Benefits
Plan For Your Future
Administered by Prudential Retirement
The Dragados 401(k) Plan makes saving for retirement easy and painless. Whether your retirement is decades away or just around the corner, it’s never too early, or too late, to start saving for your retirement. Here are a few 401(k) facts to help you get started right away.
Eligibility and Enrollment
Which employees are eligible to participate in the plan?
All employees are eligible to participate in the plan except for:
• Union/collectively bargained employees
• Non-resident aliens
Are there minimum requirements to participate?
• Leased employees
• J-1 and F-1 Visa Holders
Participation is open to employees who have met the following requirement(s): • Completion of 3 months of service as defined by the plan
When may I join?
Eligible employees may join on the first day of the following calendar month, once eligibility requirements have been satisfied.
Contributions – Employee
How much can I contribute to the plan?
Through payroll deduction, you can contribute up to the maximum allowed by the IRS. In 2022, federal tax law allows employee and employer contributions up to a combined total of $61,000 or 100% of compensation, whichever is less.
Does the plan offer 401(k) catch-up contributions?
If you are age 50 or older and make the maximum allowable deferral to your plan, you are entitled to contribute an additional “catch-up contribution.” The maximum catch-up contribution is $6,500 for 2022, indexed for future years. See your plan administrator for more details.
Employer matching contributions may also apply to any catch-up contributions you are allowed to make to the plan, subject to the same terms and conditions.
What are the similarities and differences between a traditional 401(k) and Roth 401(k) contribution?
Your plan offers you the ability to make both traditional before-tax and Roth after-tax deferrals. Traditional 401(k) contributions are made on a before-tax basis and can potentially grow tax deferred until withdrawn, when contributions and earnings are taxed at your ordinary income tax rate. In contrast, you pay taxes now on your Roth contribution, giving you the ability to accumulate a nest egg of tax-free income in retirement. By completing the enrollment form provided, your contributions will be deducted from your pay based on your before-tax and/or your Roth after-tax deferral election.
Your plan includes an in-plan Roth rollover option. If converting some of your pre-tax dollars to Roth dollars within your 401(k) plan account makes sense for you, we hope you will consider this new opportunity.
A “Roth In-Plan Rollover” (sometimes referred to as a Roth In-Plan Conversion) is the act of converting eligible pretax dollars in a qualified retirement plan to Roth dollars within the same plan. Even though the converted money
stays in the plan, the converted amount is treated as a taxable event in the year of conversion—which means that you will not have to pay federal taxes on the funds when they are eventually withdrawn, provided certain conditions are met.